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business:valuations

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business:valuations [2023/10/13 01:03] – wikiadminbusiness:valuations [2023/10/13 01:11] (current) – wikiadmin
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 **1. Price-to-Earnings (P/E) Ratio:** **1. Price-to-Earnings (P/E) Ratio:**
  
-- **Definition:** The Price-to-Earnings (P/E) ratio is a measure of how much investors are willing to pay for each dollar of a company's earnings. It is calculated by dividing the stock price by the earnings per share (EPS):+**Definition:** The Price-to-Earnings (P/E) ratio is a measure of how much investors are willing to pay for each dollar of a company's earnings. It is calculated by dividing the stock price by the earnings per share (EPS):
  
-   **P/E Ratio = Stock Price / Earnings Per Share (EPS)**+**P/E Ratio = Stock Price / Earnings Per Share (EPS)**
  
-- **When to Use P/E Ratio:** +When to Use P/E Ratio: 
  
 The P/E ratio is a widely used metric for assessing the relative value of a company's stock. It's particularly useful for comparing companies within the same industry or sector. The P/E ratio is a widely used metric for assessing the relative value of a company's stock. It's particularly useful for comparing companies within the same industry or sector.
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 **2. Price-to-Sales (P/S) Ratio:** **2. Price-to-Sales (P/S) Ratio:**
  
-- **Definition:** The Price-to-Sales (P/S) ratio measures how much investors are willing to pay for each dollar of a company's revenue or sales. It is calculated by dividing the stock price by the company's revenue per share:+**Definition:** The Price-to-Sales (P/S) ratio measures how much investors are willing to pay for each dollar of a company's revenue or sales. It is calculated by dividing the stock price by the company's revenue per share:
  
-   **P/S Ratio = Stock Price / Revenue Per Share**+**P/S Ratio = Stock Price / Revenue Per Share**
  
 - **When to Use P/S Ratio:** The P/S ratio is valuable for comparing companies in industries where earnings can be volatile or where profitability is not the primary focus. It's often used for companies that are in their growth phase or have irregular earnings. - **When to Use P/S Ratio:** The P/S ratio is valuable for comparing companies in industries where earnings can be volatile or where profitability is not the primary focus. It's often used for companies that are in their growth phase or have irregular earnings.
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 **3. Price-to-Book (P/B) Ratio:** **3. Price-to-Book (P/B) Ratio:**
  
-- **Definition:** The Price-to-Book (P/B) ratio compares a company's stock price to its book value per share. It is calculated by dividing the stock price by the book value per share:+**Definition:** The Price-to-Book (P/B) ratio compares a company's stock price to its book value per share. It is calculated by dividing the stock price by the book value per share:
  
-   **P/B Ratio = Stock Price / Book Value Per Share**+**P/B Ratio = Stock Price / Book Value Per Share**
  
 - **When to Use P/B Ratio:** The P/B ratio is valuable for industries where tangible assets play a significant role, such as real estate or manufacturing. It helps assess the worth of a company's assets. - **When to Use P/B Ratio:** The P/B ratio is valuable for industries where tangible assets play a significant role, such as real estate or manufacturing. It helps assess the worth of a company's assets.
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 **4. Price-to-Cash-Flow (P/CF) Ratio:** **4. Price-to-Cash-Flow (P/CF) Ratio:**
  
-- **Definition:** The Price-to-Cash-Flow (P/CF) ratio measures how much investors are willing to pay for each dollar of a company's cash flow. It is calculated by dividing the stock price by the cash flow per share:+**Definition:** The Price-to-Cash-Flow (P/CF) ratio measures how much investors are willing to pay for each dollar of a company's cash flow. It is calculated by dividing the stock price by the cash flow per share:
  
-   **P/CF Ratio = Stock Price / Cash Flow Per Share**+**P/CF Ratio = Stock Price / Cash Flow Per Share**
  
 - **When to Use P/CF Ratio:** P/CF ratios are valuable for assessing a company's ability to generate cash and for comparing companies with different capital structures. - **When to Use P/CF Ratio:** P/CF ratios are valuable for assessing a company's ability to generate cash and for comparing companies with different capital structures.
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 **1. Net Asset Value (NAV):** **1. Net Asset Value (NAV):**
  
-- **Definition:** Net Asset Value is a method that calculates the value of a company based on the fair market value of its assets minus its total liabilities. In essence, it determines how much shareholders would receive if the company's assets were sold, and all its debts were paid off.+**Definition:** Net Asset Value is a method that calculates the value of a company based on the fair market value of its assets minus its total liabilities. In essence, it determines how much shareholders would receive if the company's assets were sold, and all its debts were paid off.
  
 - **Formula:** The formula for calculating NAV is as follows: - **Formula:** The formula for calculating NAV is as follows:
  
-   **NAV = Total Assets - Total Liabilities**+**NAV = Total Assets - Total Liabilities**
  
 - **Advantages:** - **Advantages:**
business/valuations.1697141010.txt.gz · Last modified: 2023/10/13 01:03 by wikiadmin